Jamendo: A business model that works! (Maybe)

Recently, I've become a big fan of a French music sharing site called Jamendo. All the music is Creative Commons, free for streaming. But if you like an album, you can download it for free via BitTorrent or eMule. So far, the site has 2300+ albums uploaded. For those who thought YouTube's revenue sharing announcement was a big deal, I say, let's look instead at Jamendo's business model: jamendo

On every album and artist page there is a link to a tip jar. The artist receives 100% of the donation, minus a small transaction fee. The Web site receives the transaction fee and splits ad revenue with the artist. Jamendo uses the CCpublisher uploading tool (also used on archive.org) and lets people browse genres by folksonomic keywords. (It also lets you bookmark favorites (here, you can view my favorite albums–warning, lots of French pop and Euro-trance!). On the artist page, people can write reviews and even make blog entries about a particular album. While user ratings can affect the visibility of certain music on the site, it is still relatively easy to browse other people’s playlists/favorites and search by keyword. You can view the impressive community (and statistics about downloads and community size). But the data that drew my attention is the number of donations people are making to individual artists. It’s not a lot so far, but Jamendo is on its way to creating a community that rewards great music without qualms. Oh, and this is not particularly new, but Jamendo lets you embed a personalized music player in any web page you choose. Here’s mine:

Now here’s the million dollar question: what lessons, if any, can e-book publishers learn from Jamendo?

First, there’s an awful lot of content creators out there willing to give their content away for free (and a surprising number are good). Second, tools for distributing, cataloguing and rating this content are improving with every year. Third, the openness permitted by Creative Commons offers a way for independents to compete against various mainstream media blitzes. Fourth, it seems clear that audio books can go the way of jamendo (and in fact, podiobooks did do that–while still taking a portion of the author’s profit). Fifth, although the site has yet to produce lots of revenue, it does so without a lot of DRM. That may cause problems; for example, it’s only a matter of time before people start uploading things (and receiving tips) for content they themselves did not create. (Perhaps that’s a business model for the site itself: verifying that the content is not infringing—hey, welcome to Time-Warner’s world!).

But music and books are different beasts. You consume music in massive qualities and sometimes casually; reading is something you do more carefully, more deliberately. It’s harder to persuade a person to read a novel than listen to an album (there are lots of road trips that require musical accompaniment, not to mention chores). Music is something you can multitask; Books/e-books require more forethought (although in this generation of RSS feeds, that may be changing). Although both kinds of content are portable, we do different things with them. We use music for relaxation and e-books to fill our recreation time (or alternately, as a portable reference to serve a specific need). It takes a lot longer for reader feedback to spread throughout the community of readers than feedback for a certain song. Years–sometimes even decades—go by before people actually hear about a book.

Despite these differences, Jamendo is an inspiration for people in the content creation field regardless of genre. No more chintzy exploitation of creative content by YouTube and MySpace. Nah, we don’t need YouTube; we have Jamendo.

6 Comments on Jamendo: A business model that works! (Maybe)

  1. THis is a very interesting model. Thanks for posting about it.

  2. [quote] “But the data that drew my attention is the number of donations people are making to individual artists. It’s not a lot so far, but Jamendo is on its way to creating a community that rewards great music without qualms.”

    I made a quick count on donations from october 2007 (http://www.jamendo.com/en/?p=donorslist). The site had around 100 users donating approximately 1035€.

    The site has around 1800 artists taking donations (http://www.jamendo.com/en/?artistswithdonate=1&p=artists)

    This means that by average one artist makes around 0,5€ a month from donations.

    The point is: Unless the statistics I´ve used from Jamendo is incorrect, it is difficult to see that this is good business.

    Indeed I think the business model itself is interesting and perhaps it has a lot of potentiel. But to say it works is quite a different story. And if we look at the facts, the number of donations has risen the last years, but it is really not an astonishing increase.

    Well another interesting fact is that Jamendo has 337129 registered artists (sounds crazy but the site says so) and 205153 registered users (http://www.jamendo.com/en/?p=stats). That’s more artists than users. I cannot see how the income from adds based on this number of users supplemented with 1035€ a month in the tip jar will be able to support that many artists with more than a couple of nickels.

    Of course the artists can make money elsewhere but doesn´t this mean when all is said and done, that Jamendo is just another way of promoting music without solving the problem of making a significant amount of money on the music?

  3. Nice analysis of the business. it’s hard now to identify what model is a good one. We are French too and we launched a platform (still in beta) targeting indies. It is called NoMajors (http://www.NoMajors.com).

    We refused ads as a model because we do not believe in this source of income. In the same way, we did not want to charge artists on their sells and furthermore we allow them to create their own distribution model..

    Online music business is a complex one and big players just crashed while trying to set their rules. Thus we chose to try to build the model on Nomajors with the artists..

    Feel free to contact me to discuss the topic !

  4. Uffe, it’s a cultural thing. Our culture doesn’t yet think of tipping as an acceptable way to show appreciation of talent. By the way, in a week or two, I’m going to announce which Jamendo artists I’ll be giving tips to.

    Also, I don’t consider those stats to be anywhere near accurate. The home page now shows 6800 albums (including compilations by others) and 250,000 active members. That sounds about right.

  5. I just want to add that for part time musicians this is a great way to share music that they would normally only share with a few friends and never ask for money. You potentially get to make some money.

    One thing that I saw on the site, from my understanding, your paypal account doesn’t get a deposit until your balance is 100 Euros. That can be quite a while if any. They say it’s due to the fees that are required by paypal for each transaction.

    Right now, like everyone else has said, it is interesting and I will do my part to promote something like this. I would say that the quality of music for the most part is above average.

    I think to potentially make more money, Jamendo, will have to offer links to places like itunes where they can earn some commision. Let’s say I found some albums that resemble the beatles, but they aren’t feeding my beatles fix, so I want to download a beatles song. They could potentially make money from something like this.

  6. The website is well laid out and has a good community. As for the business model, I would rather have the full ad revenue go to Jamendo. I feel like it belongs to them really and they are just being too nice. The money would be better spent in their hands for the good of the community.
    I will be uploading some tracks as some point and I feel I would only be entitled to the money from the tips jar. Actually, any money I make from the site, I’ll be donating back. It’s for a good cause.

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